After the Great Recession, A Tepid Recovery

This morning, the Labor Department released its employment figures for the month of December. These figures are typically released at 8:30 AM EST on the first Friday of the month.

The results indicated that the economy shed another 85,000 jobs in December. While that's not nearly as negative a number as were those we saw last year at this time, it still represented a negative surprise to those economists who felt that the economy is turning the corner, and that job growth is just over the horizon.

The reality is that although the economy as a whole appeared to expand in the fourth quarter of 2009, the job picture did not really improve. The unemployment rate remains at 10%, and the "under-employment rate," representing those who do not have jobs, those who have ceased looking for work, or people who are forced to work part-time because they can't find full-time work is at 17.3%, an extremely troubling figure.

Increasingly, the idea of a "jobless recovery," whereby the economy begins to grow, but jobs are not created, is becoming less of a theoretical concept, and more of a reality. The simple fact is that companies are extremely reluctant to add jobs right now. Even where companies find themselves in need of additional personnel, they are increasingly trying to get by with temporary workers, as evidenced by the solid increase in temp hires since last July. This could be viewed as a positive indicator, as it demonstrates that companies need to add workers, and they first hire workers on a temporary basis, before adding permanent positions. On the other hand, maybe this is the start of a new trend, whereby companies will do everything they can to avoid adding full-time workers, even over the longer term.

The ramifications of a jobless recovery are pretty clear. A jobless recovery is a weak and unsustainable one. Our economy cannot get back on solid footing unless many more people get back to work. No jobs, no real recovery. It's as simple as that.

From a public policy perspective, it's time for our legislators to understand what is happening here, and what is at stake. Job creation needs to be the top priority. Instead, we're about to pass health care legislation which will make it more expensive to hire workers, particularly for small compainies, who will be increasingly relied upon to spur job creation. Just wait until environmental legislation comes down the pike, be it "cap-and-trade," or some other creative mechanism designed to increase corporate taxes. If job creation is truly the top priority, you don't pass legislation that hurts corporate profitability and makes it more expensive to hire workers. Any first -grader can figure that out.

Unfortunately, the liberals who are currently running this country (boy, those are painful words to write, but true) are determined to force their agenda down our throats.This will hamper our recovery, a fact which will hopefully become clear enough by the time November 2010 rolls around that the American people will vote for change.

In the meantime, I'm not too optimistic about the economic outlook.